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State Could Pay Back Federal Unemployment Loan Early

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Jim Grey
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https://www.flickr.com/photos/mobilene/

Significant tax relief for Hoosier employers could be on the horizon if the state’s revenues do well the next few months.

Indiana took out a more than $2 billion loan from the federal government at the height of the recession to pay unemployment benefits.  It’s been paying it back ever since. 

And as long as the state owes money on the loan, employers have to pay a penalty. 

This year, that penalty is $105 per employee; next year, it rises to $126. 

But Governor Mike Pence says he’s exploring the potential to pay back the loan, in full, early.

“If revenues hold or exceed projections, given the magnitude of the reserves that we have, we think it may be possible this fall,” Pence says.

Paying off the loan would save Hoosier employers $327 million next year. 

Still, Pence says he’ll remain cautious – the ability to pay back the loan will depend on how well state tax collections fare the next few months, as well as just how much money is left to pay back. 

Brandon Smith is excited to be working for public radio in Indiana. He has previously worked in public radio as a reporter and anchor in mid-Missouri for KBIA Radio out of Columbia. Prior to that, he worked for WSPY Radio in Plano, Illinois as a show host, reporter, producer and anchor. His first job in radio was in another state capitol, in Jefferson City, Missouri, as a reporter for three radio stations around Missouri. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.